Citigroup to cut 17,000 jobs as part of cost-saving strategy

NEW YORK – Under pressure from investors to contain burgeoning costs, Citigroup Inc., the nation’s largest financial institution, announced that it will eliminate about 17,000 jobs, shift 9,500 positions to “lower cost locations” and consolidate some corporate operations.

The steps – which are expected to shave more than $2 billion from the bank’s operating costs this year alone – also should result in faster service for consumers and businesses, Citi’s chief operating officer, Robert Druskin, said Wednesday.

“A lot of the initiatives undertaken in the name of expense reduction also are designed to unclog our corporate system,” he told the Associated Press. “We want to make Citigroup a more nimble, entrepreneurial place. We want decision-making to be quicker. We want things to move through the pipelines faster.”

The 17,000 job cuts amount to about 5 percent of the bank’s 327,000-strong work force.

Druskin led the structural expense review, which was aimed at reducing costs at the New York-headquartered bank and improving profit.

Citigroup executives have been under pressure from analysts and a number of investors, including Saudi Arabian Prince Alwaleed bin Talal, Citigroup’s biggest individual shareholder, to improve performance. The bank’s stock has not done as well as its peers, including Bank of America and JPMorgan Chase & Co., which have been more profitable.

The elimination of the jobs won’t reduce the bank’s work force, but merely slow its growth, Citi executives said.

Druskin told a conference call with Wall Street analysts they should expect Citi’s headcount to grow this year because of acquisitions and plans to open new branches, especially overseas.

“But that rate of growth will be at a significantly diminished rate,” Druskin said.

Goldman Sachs analysts William F. Tanona and Daniel Harris predicted “a tepid reaction” by investors they said had expected deeper cuts.

Carter Burgess, managing director of the Directorship Search Group, a recruiting firm based in Greenwich, Conn., said that “the question is, if all these areas for cutting expenses exist, why wasn’t it done sooner?”

He noted that Citigroup, like many of the giant money center banks, was built through a series of mergers and acquisitions and that “it’s not totally clear you can make all of this work efficiently together.”